Banks

The Exchange: San Francisco Fed boss Mary Daly

1 Feb 2022

U.S. inflation is at its highest in four decades. The central banker explains to Swaha Pattanaik how the Federal Reserve plans to tackle price pressures without jeopardising growth or job creation, and outlines her views on the outlook for monetary policy.

UBS’ Morgan Stanley impression could use more work

1 Feb 2022

CEO Ralph Hamers’ job is to get a valuation closer to the U.S. group’s 2.5 times tangible book value multiple, compared with his $68 billion bank’s 1.2. New buybacks help, but the missing ingredient is growth. Investors are understandably sceptical that Hamers can change that.

Nomura’s better numbers still need a new narrative

1 Feb 2022

The Japanese bank posted quarterly net profit of $525 mln, helped by the absence of hefty provisions for the first time since March. Boss Kentaro Okuda has been pushing into private markets and steadier earnings streams. But weak shares suggest he has work still to do.

Irish housing bind opens door to radical options

31 Jan 2022

The cost of renting in Ireland has soared, but so has the cost of buying a home. Regulatory reluctance to relax bank lending standards means demand won’t rise to help stimulate new supply. The impasse makes it more likely that leftist Sinn Féin may win the next election.

Elliott flub hurts Hong Kong investor activism too

31 Jan 2022

The pushy shareholder has thrown in the towel on its seven-year battle with Bank of East Asia. It looks like a costly defeat for Paul Singer’s firm. That an industry titan failed to break through family ties so prevalent in the city shows the hazards for similar campaigns.

Capital Calls: Netflix, Google-India

28 Jan 2022

Concise views on global finance: Netflix hints at deals by flagging the risks associated with potential acquisitions; Google’s $700 million investment in Bharti Airtel also reflects on Reliance.

SoftBank No.2 exit shows bad timing all round

28 Jan 2022

Marcelo Claure overhauled both Sprint and WeWork for the $70 bln conglomerate. His departure was at least partly about money, per media reports. Expecting a bumper payout as shares halved looks a poor move. But SoftBank is losing a key player just when steady hands are needed.

Deutsche CEO’s cost-cut ordeal is far from over

27 Jan 2022

Christian Sewing has hacked 2 bln euros of expenses since 2019, and the lender is finally paying a dividend again. Yet even if Sewing manages to hit his profit goals, his ambitions look subpar. The domestic retail and private banking units are prime candidates for further axing.

Citi picks odd time for a Mexican standoff

26 Jan 2022

The U.S. banking giant’s plan to divest $44 bln of assets under its Banamex banner has long been on investors’ wish lists. But in finding a buyer, Citi will have to navigate Mexico’s protectionist streak, and the fact that cross-border banking has fallen out of fashion.

The Exchange: Morgan Stanley’s James Gorman

25 Jan 2022

After a year of record revenue and global dislocations, the Wall Street CEO talked with Breakingviews about the future of wealth, why Morgan Stanley won’t be buying an European rival anytime soon, and how the market will have to get used to the end of free money, like it or not.

Credit Suisse shock holds warning for new strategy

25 Jan 2022

The $20 bln bank, whose Chair António Horta-Osório just quit after nine months, took more legal charges and expects a slowdown in trading and wealth management. Investors can look past old litigation. But sluggish revenue raises doubts over how it can grow while slashing risk.

Jamie Dimon’s pay is fair, but only if you’re him

21 Jan 2022

The JPMorgan boss was awarded $34.5 mln for 2021, a 10% increase, on top of an extra bonus last summer worth perhaps $50 mln. Much of it is deferred, and CEOs value future payoffs differently from mere mortals. Boards are often hostages to that mindset.

Ukraine sabre-rattling hits Russian bank investors

20 Jan 2022

If President Vladimir Putin invades, the United States has vowed to punish the country’s lenders. Sberbank and VTB don’t need foreign funding and can count on state support. Yet tumbling stocks this year show that shareholders can still get crushed by diplomatic failure.

Viewsroom: Credit Suisse chair, Unilever’s GSK bid

20 Jan 2022

As António Horta-Osório quits the Swiss lender after less than a year, Liam Proud explains what happened and offers career advice. And Unilever’s 50 bln pound offer for the pharma giant’s consumer unit puts both CEOs on the spot, say Aimee Donnellan and Dasha Afanasieva.

Fed rate feast leaves crumbs for bank customers

19 Jan 2022

Big U.S. lenders like JPMorgan are readying for an inflow of interest income as the central bank puts up rates. But the amount they pass to depositors is likely to be even more paltry than in past cycles. Competition from upstarts like SoFi may improve service but not returns.

Morgan Stanley’s $10 trln target leads to another

19 Jan 2022

That’s how much client money James Gorman wants his firm to manage in the future, more than 50% greater than today. If Morgan Stanley can get there without lowering fees, the $170 bln Wall Street bank’s share price could be 50% higher too. It’s a fitting pre-retirement goal.

Goldman Sachs goes back to the balance sheet

18 Jan 2022

The Wall Street firm’s trading and advisory fees hit a record in 2021, but momentum is fading. Goldman’s newer banking arm, which lends to consumers via credit cards and installment loans, should pick up as interest rates rise. But with lots of rivals, growth isn't coming cheap.

How António Horta-Osório can bounce back (again)

18 Jan 2022

The tennis-loving Credit Suisse chair resigned after flouting quarantine rules. He’s survived a past personal scandal and is one of a small number of Europeans with a strong track record of running a big bank. Breakingviews imagines some advice from an optimistic headhunter.

Banks’ rate-rise rewards may be bigger than ever

17 Jan 2022

Deposits at large U.S. lenders are up by a third since 2019 to $11 trln. They’ve stashed much of the cash in central-bank reserves, which immediately earn more as rates go up. Tighter monetary policy usually helps banks, but especially so given their current mix of assets.

New Credit Suisse chair has grim streak to break

17 Jan 2022

António Horta-Osório has resigned from the Swiss bank after flouting Covid-19 rules. It’s less than a year since he arrived to steady the lender following CEO Tidjane Thiam’s ousting. Incoming Chair Axel Lehmann, formerly of UBS, has to hope his reputation is more durable.